FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis Assignment

Introduction

The analysis of financial statements of companies is highly essential for evaluating the overall performance of the company and ultimately, better investment decisions can be possible. There are various financial tools that are available for making an appropriate analysis of the financial statements of companies. One such financial tool that is highly used in assessing the financial statements is ratio analysis which not only helps in the assessment of performance of a company, but also allows for better comparison of the performance of one company to that of another.

Purpose of the Analysis

The global economy has forced many companies to review their “lifestyle: in order to be competitive in the market. Today, companies' main focus is on the modification of the operating conditions with high values and high efficiency regarding the financial aspects. This paper focuses on the GlaxoSmithKline (GSK) Financial analysis for the investment purpose after the comparison with the global competitor Merck & Co.

Overview GlaxoSmithKline (GSK)

GlaxoSmithKline (GSK) came into existence 2001 after the merger of Glaxo Wellcome PLC and SmithKline Beecham. GlaxoSmithKline (GSK) Headquartered in United Kingdom where its operations are also in the United States. GSK has two segments: pharmaceuticals and consumer healthcare. While branded pharmaceuticals dominate its business portfolio, this company is also a leader in vaccines. Currently GSK has separated HIV portfolio into a new venture with Pfizer. The group currently operates 79 manufacturing sites in 38 countries, producing 1,400 branded products for 140 global markets.

The company employs about 22,600 people in the United States. Major geographical markets for GSK include the Japan, United States, Italy, United Kingdom, France, and Germany. In 2009 get hold of Stiefel Laboratories Inc along with the Pfizer Inc.'s HIV business and came up with it own HIV business to form ViiV Healthcare Limited. Moreover, during this year, GSK has acquired manufacturing and distribution group of Algerian pharmaceutical known as Laboratoire Pharmaceutique Algerien. Hence, GSK has also acquired NovaMin Technology Inc in 2009. (www.gsk.com.pk).

Competitor -Merck & Co

Merck & Co Inc (Merck Sharp & Dohme or MSD) is the largest United States pharmaceutical compnay. The headquarter of Merck is at Whitehouse Station, New Jersey. It was founded in 1891 as the U.S. subsidiary of the company German now known as Merck KGaA. Today, Merck & Co., Inc. is one of the largest pharmaceutical companies in the world. Listed on the New York Stock Exchange, the company employs about 60 thousand people, has about 30 factories, and her medications are available almost all over the world (Merck & Co Annual Report, 2011). Main products of this company comprises of:

Zetrol ( ezetimibe ), the first inhibitor of intestinal cholesterol absorption (with Schering Plough ) used for the treatment of hypercholesterolemia in combination with a statin .

Isentress, the first inhibitor of integrase of HIV.

RotaTeq, a vaccine against the rotavirus.

Gardasil, a vaccine against HPV 6, 11, 16 and 18.

Vioxx, used for the treatment of osteoarthritis, withdrawn from the market in September 2004 on voluntary decision and ...